Allphins says reinsurers are checking accumulation before they bind

Allphins says casualty, cyber and credit reinsurers are checking how new treaties could add to their accumulations before binding, as hidden links between insureds make non-catastrophe exposures harder to map.

"Underwriters need to understand what an account will do to their aggregates before they sign," Joseph Harrison, senior exposure manager at Allphins, told Intelligent Insurer in an interview published on 17 October.

The pre-bind focus puts pressure on cedants to provide better underlying data at renewal. Reinsurers need that detail to identify concentrations across corporate, financial and technology networks before accepting a treaty.

"Property cat is very well understood. You have known locations and a defined physical event," Harrison said. "Once you move into casualty or cyber, the event definition becomes much blurrier and it is far harder to predict how losses will develop and propagate."

Treaty portfolio analysis is not limited to finding an insured twice. Reinsurers also need to establish how companies are connected, how losses could spread between them and whether one event could affect several cedants. Concentrations can remain hidden when insureds are not linked to their ultimate parents across cedants.

In cyber, the hardest part is finding the software and infrastructure dependencies that connect policyholders. "It is like being given one bolt and asking which car it belongs to, whether it appears in several vehicles, or whether those vehicles share the same components," Harrison said.

Intelligent Insurer said credit schedules may omit the ultimate parent, while casualty schedules can lack basic information such as sector or company size.

Harrison said exposure teams increasingly distinguish financial ownership from operational relationships. That separates corporate group links from the software, infrastructure and other dependencies that can connect insureds.

Reinsurers are asking cedants for richer underlying data at renewal. "Treaty reinsurers are not asking for more data simply because they want it. They need it," he said.

He was cautious about AI. Running raw models across a schedule of 60,000 insureds in 30 treaty portfolios can be slow and expensive.

"AI is not making the decisions for you, and I don't think it should," Harrison said. "The responsibility still sits with exposure managers and underwriters."

Related coverage: MS Amlin says AI tool will halve reinsurance wording review time and Travelers cedes more cyber premium to reinsurers from 1 October.

Sources

• Intelligent Insurer: Hidden accumulation is reshaping casualty and cyber underwriting
• Allphins: Casualty and cyber

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